The current VA funding fee rates for purchase, IRRRL and cash-out loans, how the fee is calculated on the loan amount, worked examples, and when you can finance it.
Short answer: for most first-time VA purchase loans with less than 5% down, the VA funding fee is 2.15% of the loan amount. It drops to 1.5% with 5% down and 1.25% with 10% down. After your first use, the no-down-payment rate is 3.3%. An IRRRL is 0.5%. Some borrowers, including many Veterans receiving VA disability compensation, pay no funding fee at all.
This article is the rate chart and the math. If you want to know whether you owe the fee in the first place, start with Who Is Exempt From the VA Funding Fee?. The rates below come from VA’s funding fee and closing costs page, which lists them as effective April 7, 2023. That page was last updated October 5, 2026 when I checked it on November 7, 2026.
What the VA funding fee is
VA describes the funding fee as a one-time payment the Veteran, service member or survivor pays on a VA-backed or VA direct home loan. VA says it helps lower the cost of the program to taxpayers, because VA loans don’t require a down payment or monthly mortgage insurance.
The fee is a percentage of your loan amount. VA bases it on the type of loan and the loan amount, and for some loan types also on whether it’s your first use and how much you put down.
VA funding fee chart: purchase and construction loans
These rates apply to Veterans, active-duty service members, and National Guard and Reserve members, per VA’s chart:
First use, less than 5% down: 2.15%
First use, 5% or more down: 1.5%
First use, 10% or more down: 1.25%
After first use, less than 5% down: 3.3%
After first use, 5% or more down: 1.5%
After first use, 10% or more down: 1.25%
The jump from 2.15% to 3.3% only happens on zero-down (under 5%) loans after first use. With 5% or 10% down, first use and later use pay the same rate.
One nuance from VA: if your only prior VA loan was used to buy a manufactured home, you still pay the first-time rate.
VA funding fee for refinance loans
Refinance rates don’t change with a down payment, per VA:
IRRRL (VA streamline refinance): 0.5%
VA cash-out refinance, first use: 2.15%
VA cash-out refinance, after first use: 3.3%
For more on when each makes sense, see VA IRRRL Explained and VA Cash-Out Refinance Explained.
Other VA loan types
Loan assumptions: 0.5%
Manufactured home loans (not permanently affixed): 1%
VA also lists separate rates for the Native American Direct Loan and for vendee loans on VA-acquired property. Those are specialty programs, so check VA’s chart directly if one applies to you.
How the fee is calculated: loan amount, not purchase price
VA states that the funding fee applies only to the loan amount, not the purchase price. VA’s own example: a first-time user buys a $200,000 home with a $10,000 down payment (5% of the $200,000). The loan amount is $190,000, and the fee is 1.5% of that, or $2,850.
Illustrative examples (round numbers, first-time and subsequent use, before any exemption):
$400,000 purchase, $0 down, first use: $400,000 × 2.15% = $8,600.
$400,000 purchase, $0 down, after first use: $400,000 × 3.3% = $13,200.
$400,000 purchase, $40,000 down (10%): loan amount $360,000 × 1.25% = $4,500.
$300,000 IRRRL: $300,000 × 0.5% = $1,500.
$350,000 cash-out refinance: $350,000 × 2.15% = $7,525 on first use, or × 3.3% = $11,550 after first use.
These are examples only. Your lender calculates the exact fee on your Loan Estimate, and the down payment tier you land in matters, so confirm it with your lender before you decide how much to put down.
Can you finance the funding fee?
Yes. VA says you can either pay the fee in full at closing or include it in your loan and pay it off over time. If you finance it, it becomes part of your loan balance and you pay interest on it.
On purchases there is a hard line: VA says that on a purchase or construction/permanent loan, you can finance only the funding fee into the loan amount. All other fees and charges are paid at closing. More on that in VA Loan Closing Costs: What Veterans Actually Pay.
Refinances are different. On an IRRRL, VA says you can include closing costs in the new loan, or possibly take a higher rate so the lender pays them. For cash-out refinances, ask your lender how they structure the closing costs on your specific loan.
Funding fee vs. mortgage insurance
The funding fee is a one-time charge. VA loans don’t carry monthly mortgage insurance, which is the main reason the fee exists. FHA loans, by comparison, carry mortgage insurance premiums. If you’re weighing the two, see VA Loan vs. FHA Loan: What’s the Difference?.
Can the seller pay your funding fee?
It can be part of the deal, with a limit to watch. VA says it doesn’t limit seller credits for a loan’s normal closing costs, but it does cap seller concessions at 4% of the home’s reasonable value (from the VA Notice of Value). VA lists a credit for the VA funding fee as an example of a concession, so a seller paying your funding fee counts toward that 4%. See VA Seller Concessions Explained for how the two buckets work.
Who doesn’t pay the fee, and refunds
VA lists several exemptions, including Veterans receiving VA compensation for a service-connected disability, certain surviving spouses receiving DIC, service members with a qualifying pre-discharge rating before closing, and active-duty members who provide evidence of a Purple Heart on or before closing. The full list and the nuances are in Who Is Exempt From the VA Funding Fee?.
Refunds: VA says you may be eligible for a refund if you are later awarded VA compensation for a service-connected disability with an effective date before your loan closing. VA also says a proposed or memorandum rating received after closing does not qualify you for a refund. VA directs refund questions to your VA regional loan center.
Ask your lender to confirm whether you owe the funding fee before closing. Your Certificate of Eligibility is part of that eligibility review.
For how land equity can lower the fee on a construction loan, see VA Construction Loans. For manufactured homes and energy efficient mortgages, see VA Loans for Manufactured Homes and EEMs.
FAQ
What is the VA funding fee in 2026?
The rates VA lists, effective April 7, 2023, are still the ones on VA’s page as of November 7, 2026: 2.15% for first-use purchases with less than 5% down, 3.3% after first use with less than 5% down, 1.5% with 5% down and 1.25% with 10% down. An IRRRL is 0.5%.
Do National Guard and Reserve members pay a different rate?
No. VA’s current chart lists the same purchase and cash-out rates for Veterans, active-duty service members, and National Guard and Reserve members.
Is the funding fee based on the purchase price?
No. VA says it applies only to the loan amount, not the purchase price.
Does a down payment lower the fee on a refinance?
No. VA says refinance rates don’t change based on down payment.
Do I pay the funding fee every time I use a VA loan?
Unless you’re exempt, you pay it on each VA loan. After your first use, the zero-down purchase rate and the cash-out rate are higher.
Next steps
New to VA loans? Start with How VA Loans Actually Work or the VA loan guide. If you want help figuring out your fee, your exemption status or how much to put down, contact me.
Sources
VA: Funding fee and loan closing costs (rates effective April 7, 2023; page updated October 5, 2026)
Jimmy Hobson, NMLS #1514540, UMortgage, powered by NEXA Lending (NMLS #1660690). This article is general education, not a loan approval or commitment to lend. Your fee and terms depend on your lender, your loan and your eligibility.
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